HI6006 Competitive Strategy Assignment 2 Sample

HI6008 Business research Assignment 1 sample
September 16, 2018
HI6006 Competitive Strategy Sample
September 16, 2018

HI6006 Competitive Strategy Assignment 2 Sample

HI6006 Competitive Strategy Assignment 2 Sample

TOPIC THE “AAA” CONCEPTUAL FRAMEWORK IN CAR & AIRLINE INDUSTRY  

                                                      TABLE OF CONTENTS

TITLE PAGE…………………………………………………………………………………………1

TABLE OF CONTENTS……………………………………………………………………………2

1.0 INTRODUCTION…………………………………………………………………………………3

2.0 THE “AAA” PORTFOLIO FOR TOYOTA CARS…………………………………………3

2.1 Adaptation Strategy…………………………………………………………………………….4

2.2 Aggregation Strategy…………………………………………………………………………..4

2.3 Arbitrage Strategy………………………………………………………………………………4

3.0 THE “AAA” PORTFOLIO FOR GENESIS CARS…………………………………………5

3.1Adaptation Strategy……………………………………………………………………………..5

3.2 Aggregation Strategy……………………………………………………………………………6

3.3 Arbitrage Strategy………………………………………………………………………………6

4.0 THE “AAA” POTFOLIO FOR TIGAR-AIRWAYS………………………………………..6

4.1 Adaptation Strategy……………………………………………………………………………….7

4.2 Aggregation Strategy……………………………………………………………………………..7

4.3 Arbitrage Strategy……………………………………………………………………………..7

5.0 THE “AAA” PORTFOLIO FOR QANTAS AIRWAYS……………………………………..8

5.1 Adaptation Strategy…………………………………………………………………………….8

5.2 Aggregation Strategy……………………………………………………………………………..8

5.3 Arbitrage Strategy……………………………………………………………………………..9

CONCLUSION…………………………………………………………………………………….10

REFERENCES…………………………………………………………………………………….11

1.0INTRODUCTION

Ghemawat’s “AAA” universal strategy framework proposed three basic methods to worldwide value conception. Adaptation strategies seek to upsurge returns on capital and gain a market share by adapting one or more apparatus of a company’s business model to outfit preferences or local wants.These strategies are sub-divided into; variation, externalization, design focus, and innovation. Aggregation strategy’s focal emphasis is realizing economies of scale or choice by generating regional or worldwide capabilities. More so, they classically involve homogenizing an important share of the value suggestion and aligning development procedures and production. Geographic aggregation is not the only way for creating economies of scale but also a non-geographic dimension of the CAGE framework; cultural, administrative, geographic and economic.

The use of arbitrage strategy is the utilization of economic or other transformations between provincial or national markets which is achieved by discovering distinct portions of the supply chain in different areas. This strategy has massive influence on how the company makes profit by purchasing low in one market and selling in high prices in another market through subcontracting and offshoring.The purpose of this report is to critically analyse the “AAA” conceptual framework of Toyota and Genesis cars in the automobile industry as well as Tiger and Qantas Airways in the airline industry. These will give a better view of how successful these companies have been through the effective use of “AAA” strategies.

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2.0THE “AAA” FRAMEWORK PORTFOLIO FOR TOYOTA CARS

Improving the quality and productivity to gain some competitive advantage has always been a major issue for most manufacturing industry (D. Rajenthirakumar &P.R. Thyla),therefore it is really fundamental that car manufacturing companies should always use some innovative technology. Toyota is the market front-runner in car manufacturing industry not only in Australia but all across the globe, and through research, one can say that they have been fruitfully using “AAA” framework.

2.1Adaptation Strategy

Variation is the foremost piece of adaptation, talking about Toyota which is offering variety of models providing for all the segments of the market. It’s not only the models they make but it alsorepresents the procedures, sitting or metrics they adopt and implement. One important fact is that when products are standardized, there is a chance that they may vary in practice(Ghemawat). On the other hand, product focus is another influentialmodule of adaptation, while there are transformations when we look at same kind of models of Toyota with differences when they manufacture models for different countries (Ghemawat, n.d.-a, p.3). To be more detailed, we can surely say that Pakistani model of Toyota Corolla got Diesel engine option but here keeping Australian market in mind as they only produce Petrol engines.

2.2Aggregation Strategy

Aggregation works in aconflicting manner in order to achieve similar products between different environmental regions instead of adjusting to transformations(De Kluyver & Pearce, 2012, p.143). Additionally, Toyota is aflawlessillustration for aggregation,reason being that the company inaugurated its first production in Japan, and then built the next one in United States, with the endless growth over the period of time. Toyota stimulated too much more of a common day-to-day usage that would easily satisfy consumers across different regions and it combines the product platforms.

2.3 Arbitrage Strategy

On the contrary,arbitrage achieves differences instead of similarities(De Kluyver & Pearce, 2012). In today’s modern lexis, this is more of off-shoring and subcontracting. Toyota enjoys the advantages from arbitrage as they are attainingdifferentiation by having the bargaining power with the major as well minor suppliers and reduced supply chain,(De Kluyver & Pearce, 2012). Toyota imports their tyres from Korea at cheaper price with good value which aids in achieving the competitive advantage over their competitors in the global market place(Traub, 2012).

3.0THE “AAA” FRAMEWORK PORTFOLIO FOR GENESIS CAR

According to Mat Saman and Law (2002), in the Wall Street Journal, the Genesis car company has pursued and competitively propelled its competitive strategy through proper scrutiny and utilization of the elements of the “AAA” framework. Moreover, Saman and Law (2002) assert that Genesis Motors chronicles around an extreme luxury division of the South Korean automobile manufacturer Hyundai Motor Corporation. According to the Journal of Sports business Daily Global by Townsendet al(2010), Hyundai Motor Corporations manufactures it vehicles by innovative designs, creative new technology onboard apparatus and soaring standards for safety characteristics. Contemporarily, the Genesis Motor cars are customized into various sizes, models of high comfort and economically, and with inexpensive gas mileage.

3.1Adaptation Strategy

According to the Wall street Journal by Mat Saman and Law (2002), adaptation refers to the institutional creation of a global value by consistently changing the rudiments of the company to meet the set local necessities. For instance, the Wall street Journal (2002) describes how the Company has resulted in pursuing the elements of the “AAA” framework in order to achieve its targets and set a competitive market for competitors. The “AAA” framework is an acronym for Adaption, Aggregation and Arbitrage. Genesis Car Company mostly utilizes the Adaptation strategy among the three. Genesis Car marketing department utilizes the adaptation strategy to penetrate into new customer base in the new and untapped markets and quickly adapts measures that suitably favour the consumers (Townsend et al, 2010, p. 84). Conventionally, the Genesis Motors subdivides the adaption strategy into several parameters, which comprises of variation (making changes in products and services to enable making regulations of policies), focus and innovation (engineering the efficiency of the adaptation efforts). To sum it all, the adaptation strategy aid to achieve the core Genesis market objective, to surpass its competitors with the manufacture of comfortable, classy, durable, quality, and pocket-friendly vehicles.

3.2Aggregation Strategy

According to Townsend et al (2010), aggregation simply revolves around decisions to distinguish various markets to exploit the vast market in developing economies. In fact, this strategy propels the Genesis car company to achieve economies of scale by creating global cost manufacturing efficiencies. Ultimately, the aggregation strategy frequently involves standardization of the Genesis sales proposition, which leads to the assemblage of production and development processes of the company (Mat Saman and Law 2002, p. 77). This strategy enables the Genesis Car Company to access a wide range of new customers, therefore, being on the competitive edge of the best motor industry.

HI6006 Competitive Strategy| Assignment 2 solution

3.3 Arbitrage Strategy

According to theGlobal Integration of Brands and New Product Development at General Motors journal by Townsend et al (2010), arbitrage refers to utilizing foreign markets to increasethe profit of a company. The Genesis car Motors employs this strategy to outsource manufacturing products from cheap marketplaces and sell where the price is higher thus creating a maximum profit for their business (Mat Saman and Law 2002, p. 27). This has been one of the core competitive strategies of the Genesis car Company to gain consecutive maximum profits from their sales, which serves as the objective tool to keep Genesis as a going concern.

4.0THE “AAA” FRAMEWORK PORTFOLIO FOR TIGER AIRWAYS

Airline industry is substantively growing all over the world. Every country has their own airline companies which operates domestically as well as internationally incorporation with foreign countries to provide services and also associates agreements with other airlines.Tiger airways have a headquartered in Singapore and arepopular as a very affordable airline.In year 2007, Tiger airways operated its service in Australia, domestically with a low fare whileVirgin Australia took full subsidiary of Tiger airways.According to (Horwath, 2011),Tigerairways compete with other airlines with regards to domestic routes, capital and lower fares.

4.1Adaptation Strategy

Tiger airways achievement is by effectively adjusting in new environment. Airlines have opened wide choices to the customers to choose as per their budget. Tiger-airways set the possible lowest fares as well as overwhelming demand(Horwath, 2011).The structure adapt is forced by the price in the competitive market. In addition, Basso & Jara-Diaz(2006)stated in their journal that this structure help to gain the market segments, business opportunities, improve efficiency and enhanceprospects to open services in other regions.

4.2Aggregation Strategy

According to Basso & Jara-Diaz(2006), Tiger-airways capture good market segments in four counties due to competitive service and fareswhich is significantly good for an economy. It is also significant way of getting return. However, the cost of economies may intensify due to network structure or dimension.As par Horwath(2011), the advantage offascinating more market shares passengers is to increase demand which ultimately increases business and growth in other countries.

Tiger-airways display positive trends in turnover due to its proper network channels by using right-size in its operations. Furthermore, it shows to contribute confidently by operating new servicesand products to new realms(Horwath, 2011).

4.3 Arbitrage Strategy

The media release (2013) revealed that Tiger-airways made strategies to boost their growth. For that reason, they made a joint venture with China Airlines. This was an agreement to build a Taiwan based budgetary carrier. Moreover, Tiger-airways had also made an interline agreement with Spice Jet. This agreement had an inventiveness to permit a reliable and convenient connectivity between Tiger-airways and SpiceJet operated flights. Another agreement is with interline partners to broadencommercial activities and coordination in network.

5.0 THE “AAA” FRAMEWORK PORTFOLIO FOR QANTAS AIRWAYS

Established in the Queensland outback in 1920, Qantas has become Australia’s biggest household and worldwide carrier. Enrolled initially as the Queensland and Northern Territory Aerial Services Limited (QANTAS), Qantas isregarded as the global driving long-separation aircraft and one of the best trademarks in Australia due to its safety, operational steadfastness, crafty and support, and client benefit. The Qantas Group fundamental business is the transportation of clients by utilizing two corresponding carrier brand- Qantas and Jetstar.Qantas made a massive reversal after the worldwide financial crisis with their aptitude to yield return above their cost capital.

5.1 Adaptation Strategy

Adaptation is making worldwide incentives by transforming at least one components of an organizations offer to meet neighbourhood necessities or inclinations. It is presumably the most utilized worldwide procedure. The purpose behind this will be promptly obvious, some degree of adjustments is fundamental or unavoidable for all intents and purposes and items in all parts of the world. Adaptation includes variation, design. Focus, externalization and innovation. In regards to the Qantas, the adaptation strategies are to lower the cost and repeal the carbon tax. Similarly, Qantas extended its partnership with American Airlines and China Eastern so that it can make strong presence in the Asian markets as well as European market (Qantas Group Public Affairs Journal, 2015).

5.2 Aggregation strategy

It is about making economies of scale or extension as a method for managing contrasts. The goal is to adventure likenesses among geographic as opposed to adjusting contrast however holding back before total institutionalization, which would demolish simultaneous adjustment approaches. The key is to recognize methods for presenting economies of scale and extension into the worldwide plan of action without trading off neighbourhood responsiveness. Meanwhile, Qantas engaged in the hedging program to reduce overall cost. Not only that, Qantas adopted dual brand strategy and the basing of jets in Singapore to lower cost in a larger market which benefited Qantas by making economies of scale. Qantas adopted a board differentiation strategy that include pincer – movement tactics. Qantas broad differentiation strategy in low cost carrier advertise apparently strengthened the intensity in oligopoly market, as cost turned out to be progressively focused to capture and regain the market.Qantas Group has launched and announced new worldwide destination which include San-Francisco, Tokyo, Vancouver, Wuhan and four destinations in regional Cook Island and New Zealand(Qantas Group Public Affairs Journal, 2015).

5.3 Arbitrage strategy

The objective of this strategy is to adventure similarities among geographies as opposed to adjusting to contrast however holding back before total standardization, which would crush simultaneous adjustment approaches. The key is to distinguish methods for presenting economies of scale and extensions into the worldwide plan of action without bargaining nearby responsiveness. Outsourcing and offshoring are cutting edge reciprocals. Arbitrage can be cultural, administrative, geographic and economic arbitrage. While Qantas arbitrage strategy is associated with the reduction of supply chain risk as Qantas group is large purchaser of goods and services. On the other hand, it is focusing in cost efficiencies in the network, with a reduction in real operating costs, excluding fuel of nine per cent available per seat kilometre and aircraft utilisation at an industry high.

CONCLUSION

The “AAA” as a competitive strategy for Toyota has been successful overtime through the manufacturing of different models in different regions. Toyota is a widely used brand across the globe by consumer of automobile, and with the importation of tyres from Korea which makes them have an edge over their competitors. Outstandingly, the ‘AAA” framework succeeds to bring out the public trust brand of Genesis Car Company that has maintained best services and products to their customers and to record the highest profits. According to Townsend et al (2010), “AAA” framework remains the best choice for Genesis Car Company competitive strategy in the rapidly auto industry competition.

Adding to the conclusion is Tiger-airways who has it accomplishment by its ability to adjust in new setting coupled with lesser prices that makes them to have a strong market share through affordability and possess the strength of functioning in new region. According to the media release (2013), it is acknowledged that Tiger-airways approaches to upsurge their development through joint venture with China Airlines. Conversely, Qantas airways reduces it rate to their customers and affiliating with America and Chinese Airlines that has made them to be regionally competitive. Qantas Airline adopt a strategy called dual-brand with the base of jets in Singapore to lower cost in a lesser market, and a decrease in the operating cost and supply chain risk. We are able to finalise this report based on our findings that the “AAA” strategies adopted in the aforementioned companies has been successful overtime.

REFERENCES

All About Customer Marketing 2011, Customer Marketing International, what it is viewed Feb. 2,2017, http://www.customermarketing.com/html/whatitisviewd.htm.

Basso, L.J. and Jara-Díaz, S.R. 2005.Calculation of Economies of Spatial Scope from Transport Cost Functions with Aggregate Output.Journal of Transport Economics and Policy, 39: 25-52.

De Kluyver, C. & Pearce, J. 2012. Strategy: A View From the Top (4th ed.). Boston: Prentice Hall.

Ghemawat, P. (n.d.-a). Adaptation Strategies. Retrieved October 5, 2015, from http://www.aacsb.edu/~/media/AACSB/Publications/CDs%20and%20DVDs/GLOBE/readings/adaptation-strategies.ashx.

Horwath HT. 2011. The Future of Luxury Travel, JSTOR journal publications.

https://tigerair.com.au/tigerair-info/about-tigerair

National Carrier. 2015. Qantas transformation program: the driving force behind the turnaround. Retrieved from https://www.qantas.com.au>infodetail>about .Accessed on 30th January, 2017, Qantas Group Public Affairs Journal, Issue 3.

Mat Saman, M. and Law, C. 2002. Work Improvement at a Car Manufacturing Company.’ Journal of Wall Street, 37(1).

News.com.au. 2014. Qantas takes Virgin on in Business Class. Retrieved Feb 2 2017.http://www.news.com.au/news/qantas-goes-to-business-class-war-with-virgin-for-corporate-customers/news-story/849e73b0ca4167b5b1576a5c09abe65e

Townsend, J., Cavusgil, S. and Baba, M. (2010). ‘Global Integration of Brands and New Product Development at General Motors’. Journal of Sports business Daily Global, 27(1), pp.49-65.

Myer and C. Dorman,” Air Wars “, The Age”, Business.

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